There are two major opportunities when it comes to investing in real estate: flipping houses and buying for rental properties. Bradley Ransome discusses below some of the benefits of each type of investment.

The benefits of buying and holding properties for rentals include passive monthly income, investment appreciation, and tax advantages. The benefits associated with flipping houses includes a quick return on the purchase, more safety for the investment, and lasting improvements to the community.

Below, a look at the benefits of flipping houses and buying and holding properties is discussed in more detail.

Benefits of Buy & Hold Properties

Buy and hold properties are ones that are purchased and will be owned by the investor for at least ten years. In most cases these take the form of rental properties. The positives of this investment strategy include passive monthly income, appreciation over time, and tax advantages.

Passive Monthly Income

Reliable, passive income is one of the most ideal ways for investors to accumulate wealth, and rental properties are the best way to acquire it. The rental price can be increased with inflation, and with enough rental properties, this passive income could entirely replace a yearly salary.

Appreciation

Real estate properties appreciate rather than depreciate with age, and that is why real estate investments are such a popular choice. When an investor holds onto a property for several years at a time, they will also be able to take advantage of inflation and, if sold at the right time, can see a significant return.

Tax Advantages

Since rental properties are taxed as investments, tax rates will be lower for all the income generated from them. Plus, all the expenses can be written off in order to further lower the financial burden of the property. When it is finally time to sell the property, an investor will only have to pay the long-term capital gains rate.

Benefits of Flipping Properties

Property flipping can be done as a part-time hobby or as a main source of income. It is a friendly investment option for newbies and pros alike. The main benefits of this experience are a quick return on the money invested, the relative safety of the investment, and the opportunity to improve the community in a lasting way.

Quick Return

The most notable benefit of flipping a property is the quick return on the investment. Rather than waiting years or even decades to see significant profits from a property, it may only take a few months with a flip – the two factors influencing this are the time spent renovating and the time it takes to resell the property.

Safer Investment

Property flipping is a safer investment than many other opportunities, even when just considering the real estate industry. An investor’s capital will be at risk for less time, and since there aren’t as many people involved in the process (no tenants, property management teams, etc.), there is less that can go wrong.

Contribute to Community Improvements

Rundown houses are a blemish on a community, and one of the great benefits of flipping houses is improving the overall image and quality of the neighborhood. Not only does this improve the community, but it is also highly motivating for the people putting in the work to turn the property around.

Wrapping Up

Overall, both buy and sell properties and properties purchased for flipping and resale are excellent investment opportunities in the real estate sector. They each come with tangible and significant benefits that make them worthwhile.